Nissan introduces a new subcompact

Nissan Motor Co., which has auto assembly and engine production plants in Tennessee, said Wednesday it is adding a subcompact to its lineup. The 2007 Nissan Versa will go on sale in a hatchback version in the summer of 2006 and a sedan will follow later in the year. The Versa will have a starting price of around $12,000.

Versa cars for the North American market will be built in Aguascalientes, Mexico, starting next year, Nissan said.

The introduction is a timely one. According to the Power Information Network, a division of J.D. Power and Associates, more consumers switched to compact or subcompact cars in August than the year before.

More than 7 percent of pickup owners switched to a small car, compared to 4 percent in August 2004, while 8.7 percent of SUV owners switched to a small car, compared to 5.5 percent the year before. The data shows that vehicle owners in every segment — including vans and luxury sedans — switched to compact or subcompact cars in higher numbers.

Small cars have long been popular in Europe and Japan, but U.S. buyers traditionally haven’t warmed to them and they weren’t a priority for U.S. automakers, who make more money on SUVs and trucks. But automakers are now putting more serious effort into small models for the U.S. market. The Power Information Network expects the number of compacts and subcompacts on the U.S. market to grow from 33 this year to 40 in 2010.

Tom Libby, senior director of analysis for the Power Information Network, said automakers want to have appealing entry-level models because they can potentially win young customers for life.

Jed Connelly, Nissan’s senior vice president of sales and marketing, said the Versa and the Nissan Sentra give the company two players in the under-$20,000 sedan segment, which accounts for nearly 2 million or around 12 percent of U.S. sales each year.

The Versa will compete with the Toyota Yaris, a replacement for the Echo that will be out this spring, as well as a version of the Honda Fit, which is now sold in Asia but is expected to go on sale in the United States this spring, according to Edmunds.com.

It will also go head to head with some popular vehicles already on the market, including the Toyota Scion xA and General Motors Corp.’s Chevrolet Aveo. The Aveo’s sales were up 48.7 percent in the first eight months of the year, to 47,497. Sales of the Scion xA were up 15.6 percent, to 18,224. Industrywide, passenger car sales were up 3.4 percent.

The Versa will be sold as the Tiida in Mexico, Japan, China and other markets. The “Versa” name is intended to reflect the versatility of the interior, which is more than six feet long, Nissan said.

Versa’s fuel economy is estimated at 38 miles to the gallon. The car has a standard 1.8-liter, 4-cylinder engine.

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